People, process, organization and governance for the software-defined data center

Monthly Archives: March 2014

For seven years as an industry analyst, I studied top-performing IT organizations to figure out what made them best-in-class. And after studying 30 private cloud early adopters in 2011, I co-authored a book about how to deploy private cloud.

But after joining VMware last year, I’ve had the opportunity to spend six months working closely with VMware’s IT team to get an in-depth understanding of our internal private vCloud Suite deployment.

In this multi-part blog series, I’ll write about what I’ve learned.

Lesson learned – The most important thing I learned, and what really reframed much of my thinking about IT spending, is that VMware IT invested in our private cloud strategy to increase business agility. And that effort drastically lowered our costs.

Breaking it down:

1. We made a strategic decision to try something different.

Over the years, I’ve studied companies that use every form of squeezing IT budgets there is. But what happens with a “cut till it hurts” or a “cut until something important breaks” approach is that the primary objective of lowering IT budgets is often achieved. But it also leaves IT hamstrung and unable to meet the needs of the business. An unbalanced focus on cost cutting reduces IT’s ability to deliver. That in turn lowers business perception of IT value, which further focuses efforts on cost cutting. Define “death spiral.”

VMware didn’t follow that path when we decided to invest in private cloud. We justified our “Project OneCloud” based on belief that that the traditional way of growing IT capabilities wouldn’t scale to meet our growth objectives. We have doubled revenue and headcount many times over the last 10 years. The IT executive team had the insight to realize that a linear approach of increasing capacity by buying more boxes and adding more headcount would not support business needs as we double in size yet again. We are no longer a startup. We have grown up as a company. We had to try a different approach.

What really enabled our private cloud success was broad adoption. There is a commitment and investment in private cloud that requires broad adoption to justify the cost and effort. The promise of delivering IT services the same old way at lower cost didn’t drive adoption. What drove adoption was a new operating model focused on delivering and consuming IT as a service. Specifically, abstracting infrastructure delivered as basic compute, network, and storage as a service. Then designing IT services for specific groups of consumers that allowed them to get what they need, when they needed it. That included application stacks, dev/test environments, and any other business function that depends on IT infrastructure (almost all do in the mobile-cloud era). We strove to eliminate the need to call IT, and also eliminated tickets between functional groups within IT.

Ten different business functions — from sales, marketing, and product delivery, to support and training — have moved their workloads to the cloud. Many have their own service catalog with a focused set of services as front end on the private cloud. Many have their own operations team who monitor and support automation and process that are built on top of infrastructure services.

Carefully designing IT services, then giving people access to get what they need when they need it without having to call IT — is key to success.

3. Broad adoption drove down costs via scale economies.

We started with one business group deploying sales demos and put their work in a service catalog front end on the private cloud. Then we expanded onboarding other functional groups to the cloud. One trick – and that is to develop a relationship with procurement. Any time someone orders hardware within the company, get in front of the order and see if they will deploy on private cloud instead.

Make IT customers’ jobs easier. Accelerate their time to desired results. Build trust by setting realistic expectations, then delivering per expectation.

Three primary milestones:

Once we onboarded a few key tenants and got to ~10,000 VMs in our cloud, we lowered cost per general purpose VM by roughly 50 percent. With a new infrastructure as a service model that allowed consumers to “outsource infrastructure” to our central cloud team — and at a much lower cost per VM — word got out, and multiple other business groups wanted to move to the cloud.

Once we onboarded another handful of tenants and got to ~50,000 VMs in our private cloud, we lowered cost per general purpose VM by another 50 percent. We were surprised by how fast demand grew and how fast we scaled from 10,000 to 50,000 VMs.

We are “all in” and now on track to meet our goal of having around 95 percent of all our corporate workloads in private or hybrid cloud (vCloud Hybrid Service) – for a total of around 80,000 to 90,000 VMs. We expect cost per VM to drop another 50 percent.

So we set out to increase agility and better meet the needs of the business, delivered services that made IT consumers’ jobs easier, and as a result we dropped our cost per VM by ~85 percent.

We transformed IT to deliver IT services in a way that abstracted the infrastructure layer and allowed various business team to “outsource infrastructure.”

Ten different internal business groups have moved workloads to private cloud.

Less focus on infrastructure and easy access to personalized services made it easier for IT service consumers to do their jobs and focus more on their customers.

A new operating model for IT and effective service design drove adoption.

Broad adoption drove down costs. By ~85 percent.

Below are links to two short videos of VMware IT executives sharing their lessons learned related to cost and agility. In my next post, I’ll talk about what I learned about a new operating model for IT.

—-Follow @VMwareCloudOps and @kurtmilne on Twitter for future updates, and join the conversation by using the #CloudOps and #SDDC hashtags on Twitter.

You have heard it said that “rock and roll is dead.” The same could soon be said about your IT department.

External pressures are driving an extinction of the IT department. Today’s business users are becoming more and more savvy, growing up with all kinds of technology in both the home and the office. Desk-side computing is dying off quickly, being left behind by technologies—like tablets, smart phones, and even wearable technology like eyeglasses and wristwatches—that make your employees more mobile and agile. This type of technology doesn’t typically need desk-side support, and when users are frustrated enough to need “human” help, they look for services such as Kindle’s Mayday for instant assistance that’s specific to the device/service that they are experiencing issues with.

The movement toward mobility and agility naturally drives organizations toward more cloud-based services, and software as a service (SaaS) rather than customized applications. This means that as time goes on, storage infrastructure, compute infrastructure, network infrastructure, and the data center will become less and less relevant.

Today’s business managers need to move at the speed of technology, and often consider the IT department a hindrance more than anything else. So how do you reverse that trend?

1. Become a “service provider” or be left in the dust.

Shifting your focus from technology to service management, you act as broker of the cloud services available within the marketplace. In order to “run IT like a business,” the IT department needs to have a clear picture of the services it provides and how these services create value for its customers.

Through full transformation of your organizational structure, core processes, and management tools, you are able to facilitate, combine, and enhance cloud services to add business value.

2. People are paramount. Your IT org chart should match your service-oriented approach.

Where today your organization is likely heavily vested in operational resources, a more mature organization will be needed. Your IT department will no longer deliver technology but will become a truly service-oriented organization and must be resourced appropriately.

You may find your organization chart actually reflecting a service lifecycle with service strategy at the top of the pyramid and service design, transition, operation, and improvement on the bottom of the pyramid. Consider how your services will flow naturally through the bottom of your organization chart, moving left-to-right/cradle-to-grave.

3. Perfect your processes. Even the greatest technology means nothing if there isn’t a solid plan in place to deliver it.

If you are still thinking technology is the solution, it’s time to get your head out of the clouds; or better said, into the clouds. An IT service provider that will last the test of time will have robust processes in place for:

Relationship and Demand Management

Portfolio and Finance Management

Supplier Management

Change, Configuration, Release, and Validation Management

Portal Management

Reporting Management

Without these processes in place your customers will never truly understand or appreciate the value of the technology you are providing.

4. Technology changes CONSTANTLY. Accept that and adopt it as part of your strategy moving forward.

Rather than blather on about technology, talking about what’s hot and what’s not, accept the simple fact that technology changes every day in real and profound ways. You must avoid resistance to change and embrace innovation when it makes good sense from a cost and risk perspective.

At this moment, technology is clearly trending toward attributes like mobility, community, utility, and self-service. Your customers (the business) are better informed than ever of these trends and are expecting their business to move at the speed of technology. Be an enabler of these new trends, not a roadblock.

5. Your customers (the business) will either love you or leave you. Focus on their experience with IT above all else.

You must provide service to not only meet user requirements, but also user expectations. Users want to feel empowered and immediately gratified. Become the preferred method to engage services. Provide a positive user experience that users want to engage with, and not just because they have to. Become a trusted advisor, aware of both the business and IT trends. Be impressive when it comes to managing suppliers/vendors, and be excellent project managers.

You must deliver services in such a way that your users are left not merely satisfied, but actually exhilarated by the service they received. Otherwise, you are not adding value and cannot compete.

Your focus must truly shift from technology to services. And, you must begin this journey now, before becoming obsolete like so much of the technology you have retired from your environments. Be willing to look outside your organization for solutions, and realize the paradigm shift from technology design to service delivery.

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Jason Stevenson is a transformation consultant with VMware Accelerate Advisory Services. He is based in Michigan and one of only seven certified ITIL Masters in the U.S.

About this Blog

This blog is for busy people who do things. And for people who make decisions about how to do things. It offers applied insights and lessons learned for IT infrastructure and operations professions responsible for building, managing and optimizing IT Operations in the cloud era.